EM quiet ahead of Fed news; Emirates NDB, Mazoon pricing soon; Grupo Bimbo sets roadshow

By Rebecca Melvin

New York, Nov. 1 – The emerging markets put in a fairly quiet day on Wednesday as market players watched for an update on U.S. monetary policy following the Federal Reserve’s Open Market Committee meeting and ahead of the widely anticipated announcement of U.S. President Donald Trump’s pick for next Fed Chair, market sources said.

The FOMC left rates unchanged and pointed to solid U.S. economic growth and a stronger labor market, which were read as signaling it is still on track for a rate increase in December.

Later in the day, the Wall Street Journal reported that the White House had notified Federal Reserve governor Jerome Powell that Trump intended to nominate him as the chair position but that the official announcement would not be made until Thursday.

Another factor quieting market action on Wednesday was that many countries in Europe were celebrating the All Saints Day religious holiday, which thinned the ranks of market participant at their desks, a source said.

Deals kept trickling though the primary market however. In the Middle East and Africa region, the Emirates NBD is roadshowing a possible deal for five-year notes under Regulation S, according to a market source.

HSBC, Nomura, Societe Generale and Standard Chartered are the banks organizing the meetings for the Dubai-based lender.

Oman’s Mazoon Electricity Co. SAOC was also expected to price Wednesday a $500 million 10-year sukuk to yield 5.2% to 5¼%.

Meanwhile, three deals were roadshowing including a Credit Europe Bank NV transaction for tier 2 notes, the Kazakhstan Temir Zholy dollar benchmark that is roadshowing until Nov. 7 and Petropavlovsk plc’s up to $450 million offering of five- or seven-year dollar notes, a London-based market source said.

In Latin America, Mexico’s Grupo Bimbo SAB de CV scheduled fixed-income investor meetings for a U.S. dollar-denominated offering of senior unsecured notes this week and wrapping up on Monday, a market source said.

HSBC, JPMorgan and Mizuho Securities are the banks organizing the meetings for the notes being sold under Rule 144A and Regulation S.

Grupo Bimbo is a Mexico City-based bakery and food company.

The primary market for emerging markets was expected to remain firm in November after a pretty robust October, in which deals saw high investor demand and many were significantly over subscribed.

The secondary market was also strong aside from pockets of weakness related to geopolitical tensions and other uncertainty. Specifically, Turkish banks and Qatar were weaker in recent trading.

Another news item that market players pointed to was the U.S. tax reform package that was expected to be unveiled on Thursday. As for the Powell nomination, the choice was seen as in line with current Chair Janet Yellen’s moderately dovish approach, yet representing positioning to reconsider some of the post financial crisis regulations.

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